Default - is notice required?

KatieDee

Hello everybody,

In preparation for applying for a mortgage, I checked both mine and my partners credit reports with Noddle and Experian. Mine is perfect, but he had a very recent default on his account from EE. He denies that EE have ever tried to contact him regarding this, and after making them aware, it took them four months to find the actual account. It was a sim only contract which he cancelled over the telephone, but for some reason it continued to run. He moved house around the date the default would have been served, so did not receive it. He didn't think to advise EE of the change in address, as he was no longer a customer of theirs.

We spoke to EE a few days ago and explained the situation. The default was for a whopping £81 and as it's so recent, may affect our chances of securing a mortgage. He paid it off immediately so it should show as settled, but I'm looking for guidance on the actual default.

I asked for a copy of the default, as he had not seen this himself, and EE refused to provide this. At first they tried to say the default notice didn't exist and they did not have to serve one to place a default on the account. They then tried to say it must have been served by another company acting on their behalf (it wasn't). The adviser said he didn't know what I was talking about, and a default is just a marker on the credit file and nothing more. Apparently no physical default has to be served.

Am I right in assuming that a company has to serve a notice of default to an individual, before or at the time of placing a default on their credit file? I didn't want to push this too far, as it's very likely I could be wrong! Any guidance would be much appreciated.

We are currently in deadlock in terms of complaints. There are several things we disagree with regarding this default, but if I am wrong then I am more than happy to accept it, drop it, and focus on making sure we save a bigger deposit for when the time comes!

fermi

https://forums.moneysavingexpert.com/discussion/3172602

CRA Default on a credit file Vs default under the CCA

I was not sent any default notices, should the default on my credit reference file be removed?

In most cases, the answer will be ‘no’, provided that adequate fair processing information was provided when the account was originally opened.

It may help to explain that a “default” on an individual’s credit file does not mean that an individual has been defaulted under the Consumer Credit Act; essentially, the same word is being used to describe two slightly different things (which can obviously lead to some confusion). Instead, a “default” on a credit file simply means the lender considers the relationship between itself and the individual to have broken down.

Therefore, whilst it may be a requirement of the Consumer Credit Act to issue default notices, there is no DPA obligation on a lender to issue a default notice to individuals before marking an account as being in default on their credit file. Although we advise that it is good practice to issue a notice, lenders will often have provided individuals with fair processing information about defaults and notices in the terms and conditions when the account was opened. Provided this was the case, then it is likely to satisfy the “fairness” aspects of the first principle.

KatieDee

fermi wrote: »

https://forums.moneysavingexpert.com/discussion/3172602

Literally just spotted this information through searching on the forums. Probably should have done this first, but thank you very much for your response!

Perhaps it might be worth finding a good broker and saving like mad for our deposit :rotfl:

fermi

However, read the 1st post in that link. It goes into more details of when a warning and chance to rectify should at least be given.

KatieDee

fermi wrote: »

However, read the 1st post in that link. It goes into more details of when a warning and chance to rectify should at least be given.

I will give it a good read, thank you. They did advise that we could request a copy of the account for £10, but this may not include the actual letters/dates (which is the one thing we wanted to see, as they were never received in the first place due to the change of address).

It's frustrating because the amount is relatively low and as far as my partner knew, the account had been closed. I know this is no excuse and a default accurately represents the time which has passed with no payments, but there are genuine reasons for this lapse of payments and it's annoying that no amount of explaining will change that. It's so odd to think that missing a few months phone contract by accident could affect your financial future so much!

I'm sure they hear excuses all day regarding non-payment though, so I understand their reasoning. Thanks again